Babcock Wind Agrees to Sell Spanish Energy Assets

By Angela Macdonald-Smith

Aug. 21 (Bloomberg) -- Babcock & Brown Wind Partners, a wind energy producer managed by Babcock & Brown Ltd., agreed to sell its Spanish assets to Fomento de Construcciones y Contratas SA as it seeks to reduce debt and fund future investments.

The sale of the projects, which have a capacity of 421 megawatts, will yield a profit of about A$266 million ($232 million) before costs, Sydney-based Babcock Wind said today in a statement to the Australian stock exchange. The value of the sale, including debt, is about A$1.42 billion, it said.

Babcock Wind said in February it may sell assets in Europe to benefit from increased valuations from projects that is not reflected in its own market value. Fomenta de Construcciones y Contratas, based in Barcelona, is Spain's third-biggest builder.

The price for the Spanish assets ``produces a large gain on sale for BBW and, importantly, is materially higher on a per megawatt basis than the current market implied value of BBW's total portfolio,'' Miles George, chief executive officer of Babcock Wind, said in the statement.

Babcock Wind fell 16 cents, or 12 percent, to A$1.15 in Sydney trading. The Spanish assets represent about 17 percent of its total wind portfolio.

The company decided not to sell its assets in Germany, after reviewing offers it received for the ventures. A divestment process for projects in Portugal and France has been extended and any sale would be agreed in the fourth quarter, it said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net